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January Inflation at 2.7 Percent

Year-on-year headline inflation in January rose to 2.7 percent from 2.6 percent in December, well within both the Government's target range of 3.0 percent 1.0 percentage point for 2017 and the BSP's forecast range of 2.3-3.2 percent for the month. Meanwhile, core inflation, which excludes certain volatile food and energy items to measure underlying price pressures, was steady at 2.5 percent. On a month-on-month seasonally-adjusted basis, headline inflation slowed down to 0.1 percent in January 2017 from 0.4 percent in December 2016.

The uptick in the headline inflation rate was traced mainly to faster price increases in non-food items. In particular, prices of domestic petroleum products, namely gasoline, diesel, and liquefied petroleum gas (LPG), were adjusted upward, influenced by higher prices of international crude oil. Likewise, inflation rates for clothing and footwear as well as health services also went up during the month. On the other hand, food inflation slowed down in January, as higher prices for certain food commodities such as rice and fish were offset by slower price increases for meat, fruit, vegetables, and sugar.

Officer-In-Charge Nestor A. Espenilla, Jr. noted that the latest inflation outturn continues to be consistent with the BSP's assessment that inflation will gradually move towards the target range over the policy horizon. Going forward, the BSP will continue to closely monitor emerging price conditions to ensure price stability conducive to a balanced and sustainable economic growth.